The Impact of Public School Enrolment on Child Labor in Punjab, Pakistan

Abstract

This paper investigates the causal impact of public school enrolment on child labor. Our main hypothesis is as follows: Is school enrolment a substitute for child labor? Recognizing that schooling and work choices are jointly determined by parents in a utility maximizing framework, the study applies an instrumental variable solution to the problem of simultaneity. This approach entails using the receipt of free textbooks and access to a public primary facility as instruments for public school enrolment. Using data from the Multiple Indicator Cluster Survey for 2007/08, our working sample consists of children between 5 and 14 years of age, which makes up 25 percent of the surveyed population. The results suggest that public school enrolment can be used as a substitute for child labor. On average, a 1 percentage point increase in a household’s enrolment ratio has the potential to reduce the number of hours of paid labor by almost 5 percentage points, ceteris paribus. This substitutability is highest among poor, urban, male children. Moreover, the incidence of child labor is higher among larger poor families.